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Tuesday, July 19, 2011

A country's purse strings

Imagine, for a moment, the opportunity.The trajectory of spending on the federal level could be altered with a deal here; real savings could begin, and inventive minds will try to extract from the remaining budget a way to serve the American public. Congress can get $3 Trillion in spending cuts for about $1 Trillion in tax revenues through closing loopholes. This would be more than the bare minimum. Unfortunately, for purposes of ideological posing, that's the only result we're getting: a protest vote about raising the debt ceiling without any cuts enacted, and the President asked to bare the political burden with a provision listed in the fourth clause of the 14th Amendment, after months of wrangling.

Now, there are many cold-hearted opportunists in the midst of the political system at the elected and bureaucratic levels, to be certain, but I personally know of hard-working people who came to depend on entitlement programs; a write-off of a health care debt that would intimidate any working family was necessary so that my dear littlest nephew would have a shot at life.

I do not want the entire U. S. Government shut down. I do want better accounting! I do hope we will not be handing a huge stimulus over to the banks, when spending that reaches the people is crucial if the fed plays an active role in battling the recession. Obviously, the rich have gotten richer by far and large, and our diet of steady tax cuts have had a decade to yield American jobs, so it is going to take something oh-so-loathed by those who cannot understand: a middle road.

The Republican victory and Tea Party influence of the 2010 election was no personal affront to me; especially in a time when so little was done to concentrate on jobs by Congress, it is only fair that opposing voices are given representation. My one point of optimism was the possibility of reducing the monstrous U.S. budget, without double dipping the national GDP into recession once more.

From the Lookout:A less prominent agency, Egan-Jones Ratings, largely avoided buying into the subprime madness. That might be because it's not paid by the Wall Street banks whose securities it's rating; instead it collects fees from investors who need accurate assessments, so it has more of an incentive to get things right.And wouldn't you know it? Egan-Jones announced yesterday that it had downgraded the U.S. debt rating, from AAA to AA+.

The firm made it clear that its decision wasn't prompted primarily by the immediate fear of a default caused by a failure to raise the debt limit. Rather, Egan-Jones officials explained the downgrade arose out of the related concern that Washington won't reduce the long-term deficit. "The major factor driving credit quality is the relatively high level of debt and the difficulty in significantly cutting spending," the firm said in a report released Saturday.

I am outraged by the lack of accountability in wake of the financial crisis that has made things so hellish for my small business and many others in these past three years. I do not think, however, risking the Great Depression over defaulting on the debt is the answer. That's stupid, to throw away America's triple-A credit rating! The GDP would shrink ten percent, according to some economists, from the initial default. But the hard line is necessary to express fiscal conservatism's support among the American people, even while so many of them could not imagine life without Medicare and other programs such as Social Security.

So: a middle road.

So much has been offered by the Obama Administration, they have to almost hope that the deal hatched in the Senate by Majority Leader McConnell goes through: no immediate changes, just an empty-suited protest vote that will be vetoed, and allow the debt ceiling to go up as it did five times during the Bush Administration and seventy times since World War II.

I do support the raising of revenues to tax earners of over a million dollars and the closing of a swath of loop holes; it is not fair for so much wealth to be greedily hoarded from people who are simply trying to have a modest life and living. I do not support the sacrifice coming from entitlements only. There are a few reasonable military cuts that would make a big difference back home; some of these same soldiers could be helping us restore our nation's infrastructure, for example. The moral cost of war is a debate you may have amongst yourselves without minds really changing, but here we are discussing economics, albeit with a moral compass in hand, and a view towards the long road: hope for actual, messy, gradual, difficult change, rather than look back on the opportunity that was America.